AUGUSTA — Gov. John R. McKernan said Thursday there was still time for the Legislature to adopt a $3.2 billion two-year budget this weekend and avoid an unprecedented shutdown of state government on Monday, July 1.
“If something is done this weekend, we can avoid a shutdown. There would be some disruption, but government would not shut down,” McKernan said in a midday briefing.
McKernan said his Cabinet was preparing for the possibility of a government shutdown, and also “the faintest of possibilities” that the National Guard might have to be called up to run the government if no budget is passed.
Democrats and Republicans were trying to pick up the pieces after a partisan standoff over Workers’ Compensation reform and some elements of the budget late Wednesday night. The Legislature was not scheduled to convene again until Friday morning.
A Democratic package of workers’ comp reforms that McKernan has vowed to veto was being held in the Senate where it won final approval by a single vote Wednesday night.
McKernan has said he won’t sign the 1992-93 budget, needed to offset a projected $1.2 billion shortfall, unless the Legislature enacts workers’ comp reforms that will produce significant savings to Maine employers.
Democrats say that Republican proposals on workers’ comp cut too deeply into benefits for injured workers.
House Majority Whip Joseph Mayo of Thomaston said a budget could have been approved already if not for McKernan’s insistence on linking the budget to the volatile issue of Workers’ Compensation.
“I’m getting sick of it,” said Mayo.
But House Minority Leader Walter Whitcomb of Waldo said Republicans would not support $300 million in new taxes, and $100 million in higher taxes and fees, without workers’ comp reforms that would cut employer premiums by one-third.
Whitcomb said compromise on a number of sticky issues was possible.
“There are moderate factions in both parties who are trying to agree,” he said. “I have no doubt we will have a budget. There are some huge financial issues to resolve, but the Maine Legislature works and a lot can happen in 24 hours.”
McKernan sounded cautious and mildly optimistic that breakthroughs could be achieved to keep state government running smoothly.
“Things are starting to happen,” he said. “We are looking more at a timing problem than a lack of will. Some legislators are crossing party lines and trying to demonstrate that the system works.”
McKernan said it was his responsibility as governor to ensure that state services protecting health and safety were maintained even if most of the government had to shut down.
“I do not foresee having to call out the National Guard,” he said. “But we have looked into it, if there were a civil emergency. … At this point, we do not think it would be necessary.”
McKernan said supervisors wanted to be able to notify workers on Friday whether they should come to work or stay home on Monday in the event the Legislature could not muster the two-thirds vote needed to approve the budget.
Even if a budget is approved this weekend, it appeared unlikely that many state employees and welfare recipients would get checks due Monday on time.
“No checks are going to go out until there is a budget signed by me,” said McKernan.
Richard Trahey, a lobbyist for the Maine State Employees Association, said state-worker pay days already had been rolled forward from Wednesday to Monday.
“There is so much difficulty with unpaid furlough days and rolling pay days, they don’t need something like this. There are some pretty concerned people out there,” Trahey said.
Half of about 15,000 state workers are due to get pay checks on Monday.
The Appropriations Committee was looking for ways to make up for the loss of $45 million that could have been saved with a controversial McKernan plan to lower retirement benefits for state workers with fewer than 10 years of service, and also boost retirement contributions by 1.15 percent for all workers.
State-employee unions vowed to take the retirement-benefit plan to court if it were enacted, and Democrats said they would oppose it.
“I hope the committee is through tonight,” said Sen. Ruth Foster, R-Ellsworth, a member of Appropriations. “I’m the eternal optimist and I’m confident we can do it.”